World trade leaders dread a Trump presidency

GENEVA — Donald Trump has officials in this world capital of trade running scared.

Faced with the prospect of a U.S. president who pledges to rip up trade agreements, slap tariffs on allies and pull out of the World Trade Organization, top trade officials are in various states of denial and dread.

Some attending a WTO meeting this week consoled themselves the populist billionaire couldn’t really win the election — “though after Brexit, nothing can be ruled out,” warned Jonathan Peel, a member of the European Economic and Social Committee.

Others say they doubt Trump "really means what he says” about trade agreements, as one high-ranking official here put it.

A few cling to the hope that even if he were elected and tried to deliver on his pledges, he would be stymied by Congress, the courts or other impediments. “Policy has to be built on reality, and if you are elected, you cannot disregard reality — not even Trump,” said another official.

These are confounding times for global trade officials who have spent their careers promoting the gospel of open markets as the path to prosperity and peace, and who regard recent developments in the U.S. with “a mix of amazement and consternation,” as one official put it.

“What is of concern is that those words are finding echo in the population” — WTO Director General Roberto Azevedo

In the short term, many fear Trump’s election would mean the U.S. would step back from its leadership role in the WTO, which would undermine the group’s clout, whether negotiating new agreements, resolving disputes or enforcing participants' adherence to existing pacts.

But more broadly, Trump’s slashing anti-trade rhetoric as well as Hillary Clinton’s opposition to the pending Trans-Pacific Partnership — following on the heels of the United Kingdom’s vote to leave the European Union — are such significant rebukes they are causing many officials to re-examine some of their most cherished assumptions.

“What is of concern is that those words are finding echo in the population,” said WTO Director General Roberto Azevedo, referring to the campaign rhetoric of both Trump and Clinton.

“We cannot turn a blind eye to that and assume that everything is OK once the campaign is over,” said Azevedo, a Brazilian who has led the global trading body since 2013. “That’s one problem that we have today: Those voices have been there for a while, and nobody ever took the time to really understand it and find a solution for that problem.”

Trump at the Republican National Convention in Cleveland | Joe Raedle/Getty Images

Most of the Geneva-based officials interviewed for this story declined to talk on the record, saying it was inappropriate to comment on U.S. domestic politics and noting they may have to work with President Trump in the not-so-distant future. One exception was Russian Ambassador to the WTO Gennady Ovechko, who asserted the “Russian Federation never intervenes in domestic affairs of foreign states” and that he would work with whatever administration the American people elect.

But all said they have been paying close attention as the raucous presidential campaign pulled trade policy from a wonky side topic to one of the most hotly debated electoral issues.

Trump’s anti-trade rhetoric is not unheard of in Europe, where nationalist parties in Britain, Denmark, the Netherlands, Greece and France espouse similar themes. Many officials here trace such sentiments to the continued effects of the 2008-2009 financial crisis and the “sense that trade did not deliver all of its promises,” as one put it.

Yet they still fully believe that international trade is a net positive for individual countries, and that closing borders would be a way of “shooting yourself in the foot,” even while they acknowledge that some people have been hurt by trade, and their plight ignored by their governments.

“The fact that trade has a net positive effect in the economy is no consolation for the guy who lost his job due to cheaper imports,” Azevedo said. “That’s something that governments need to be mindful of. They have to prepare those people for new opportunities, new jobs, retrain them, which is not easy — easier said than done. And in many instances you have to provide … temporary support to help them to wait and get another job … which will probably be not as well paid as the previous job. It's a complex equation."

The focus on job losses is much more an American than a European issue, several officials said. The overriding argument against trade in Europe is that it pushes down labor and environments standards.
“But that is a different story from Donald Trump,” one official said. “I’m not certain that Donald Trump is extremely interested in any environmental standards.”

“I don’t want to even entertain the idea of Mr. Trump becoming president of the U.S. ... Because that would be a disaster” — senior Geneva official

Many international trade officials say they are also concerned about Clinton, citing her pledges to focus on enforcement of trade rules and her turnabout on the still-pending Trans-Pacific Partnership.

Compared to Trump, however, the former secretary of state who once called the TPP the “gold standard” of trade deals is considered far less trade-averse — someone who will eventually pursue a trade strategy at least somewhat similar to Obama’s, if not quite as ambitious.

At the first debate earlier this week, for instance, she called for “smart, fair trade deals,” adding that the United States accounts for only 5 percent of the world’s population but needs to “trade with the other 95 percent.”

If Clinton wins, then, trade supporters will more easily be able to brush off the current spate of anger as something that will fade as the economy continues to improve.

If it’s Trump, though, trade officials acknowledge that “we have to defend what we have achieved,” one official said. “We have to explain better what we’ve done, what we’re doing here, in order to dispel misunderstandings.”

But doing so is challenging, officials say, when the solutions involve extolling the benefits of trade to people who have been hurt by it and pressing member nations to build up their social safety nets.
It is much easier to deny the situation could ever become reality.

“I don’t want to even entertain the idea of Mr. Trump becoming president of the U.S.,” said another senior Geneva official when asked about the U.S. presidential campaign. “Because that would be a disaster.”

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Percy Granger

Faced with cheap Chinese steel imports the US government slapped heavy duties on Chinese imports. So free trade is not so free? EU also defended their steel industry from Chinese imports with higher tariffs.

The call by TRUMP to review all trade-related matters to be expected given the shocking US trade deficit.

Note that Europe limits Korean car imports. The EU and USA have demanded that China stop exporting so much stuff due to their massive international trade surplus. TRUMP stating the obvious that US manufacturing jobs being lost. US companies must be given tax incentives to stay in the USA. As an example BMW built new auto plant in Dresden and not Eastern Europe to save German jobs. That was a decision reached with German government support. TRUMP is right

Posted on 10/1/16 | 8:59 AM CET

Everpresent

Will be very interesting if Trump becomes President and US companies based in the U.K. Are affected by any post Brexit tariffs into the EU. Also I can see him being extremely unhappy with countries such as Belgium not paying their full 2% into NATO. I can see these countries, losing their NATO protection, and in the case of Belgium the NATO HQ!!

Posted on 10/1/16 | 12:11 PM CET

Jack Anderson

NATO “protection” not convincing as a real peace guarantor for Europe. The Russians are not coming. Russia re-claimed Crimea because Kiev requested NATO membership. Ukraine staged coup by foreign parties to renew NATO. NATO in need of a cause in order to justify its own existence.

Most Germans would shudder at the prospect of another war with Russia. The US sees Europe as a Great Game type chess-board to move pieces around to divide Europe. NATO in Afghanistan failed so now that country makes deals with warlords as the only solution. In the end its not tanks that settle scores. Only Poland and Ukraine seek a new military confrontation with Russia for historical reasons; conspiracy theory?